There have been more than 250 distributed denial of service attacks against U.S. financial institutions since 2011, Lew says. So far, they’ve made life inconvenient for banks and their customers, but the risk of a “catastrophic” attack can’t be ignored.

Lew says cyber security must be the responsibility of “management at all levels.”

Many firms are reluctant to report cyber security breaches out of fear of damage to their reputations, but this has to stop, Lew says. He also calls on Congress to pass tougher cyber security legislation.

Lew says he’s calling for companies to show some “economic patriotism” and emphasizes a call for “comprehensive business tax reform.” If that can’t be done quickly, something else needs to be done to shut the door on inversions.

Lew says a top U.S. corporate tax rate in the 20s percentage wise would help spur normalization of tax rates around the world. While the U.S. has a high marginal corporate tax rate, a slew of loopholes makes the effective rate more toward the world norm.

Lew says he hopes everyone “learned their lesson” from previous showdowns and its impact on the economy. “I hope we never go back to what we saw last October” when the debt-ceiling threat raised the specter of default, he says.

Lew says he believes the carried interest provision, which allows hedge fund fees to be taxed as capital gains rather than regular income, is used inappropriately. Probably not a popular position with the crowd here.

Griffin says entire business as moved toward trading equities, fixed-income securities, commodities and other highly liquid assets. By focusing on liquid markets, Citadel had a lot of success and was able to “find the room to get back on our feet and prosper.”

If you’d been away for five years, looked at current U.S. charts, you would find it hard to believe rates were near zero, the Fed was planning to keep rates low, and that the central bank was still buying assets, he says.

While there’s debate about what is a neutral Fed funds rate, central bank should be moving toward it so there is room to act if things take turn for worse, he says.

Druckenmiller says he’s not sure the Fed’s actions will necessarily end badly, but it is certainly a bad bet. Since the impact of the Fed’s action hasn’t really seeped into the banking sector, it doesn’t mean a repeat of 2008-09 is on the horizon.

“We’re not to a systemic phase. It will be interesting to see” how things develop in next year or two, he says.

If you don’t like inversions, “change the law,” Druckenmiller says, but he seems to take umbrage at the idea that companies that move their HQ for tax purposes aren’t patriotic. They’re following the law, he says.

New Jersey Gov. Chris Christie sits through a relatively gentle interview from CNBC’s John Harwood during lunch at Delivering Alpha.

Christie insists he hasn’t decided on whether or not he will seek the Republican presidential nomination and that he doesn’t need to make a decision until late this year or early 2015. He insists he was merely enforcing an existing law when he moved to block Tesla from selling cars directly to individuals.

Christie dodges a question on the Ex-Im Bank, which congressional Republicans are pushing to de-fund, saying it’s not something he thinks a lot about as New Jersey governor but if he runs for president he’ll have an opinion.

On the bridge scandal, somebody went “rogue,” he says, adding that he wishes it hadn’t happened but that he took responsibility for it and people were fired.

Coming up next is billionaire hedge-fund manager John Paulson. He’ll probably be queried for his take on 21st Century Fox’s reported bid for Time Warner. We’ll also be listening for his comments on Valeant’s takeover of Allergan.

Paulson says his firm has built up expertise in merger arbitrage and that firm monitors almost every deal around world that’s bigger than $1 billion.

Spreads have opened up, he says, and that’s attractive. The second area is hostile takeovers where the outcome is uncertain. It’s possible to lose money on such deals, like Pfizer’s proposed bid for AstraZeneca, but deals like the battle for Hillshire can be very profitable.

Then there’s the art of trying to pick out the next target. That can lead to premiums of 40% or 50% or higher. A last category is “strategic acquirers” who have grown their company very quickly. Best example, he says, is Valeant, which is up around 800% since embarking on an “accretive acquirer” strategy.

Paulson talks up Valeant. He has a stake in Allergan, which is rebuffing Valeant’s takeover efforts. Paulson says he doesn’t think any company has done more to enhance shareholder value than serial acquirer Valeant in pharma sapce.

Paulson’s also excited about the oil sector, particularly extraction technology

A lot of progress has been made on extracting oil from shale via fracking and horizontal drilling.

Companies like Whiting Petroleum become more attractive as they grow. If you’re a major oil company with no presence in shale, combined companies and other independents are attractive to bigger buyers, he says.

What does Paulson think of rebuffed 21st Century Fox bid for Time Warner?

Since Fox is about same size as Time Warner, there probably isn’t massive upside for future bids, he says. “There’s a limit to how much cash you can pay” and to how much stock you can use before the deal becomes dilutive.

There aren’t many other potential bidders out there given Time Warner’s size, Paulson says.

So does Fox come back with another bid and can it persuade Time Warner to sell. “These are all issues we have to look at,” he says.

Paulson says buying a primary residence is still the best investment. Mortage costs are still low. Investors can lock in the cost over the next 30 years. “If you rent, the cost of rent goes up every year,” but if you get a mortgage you lock it in.

Up next Best Ideas from the Next Generation with Institutional Investor Editor Michael Peltzer. He speaks to Josh Birnbaum of Tilden Park Capital, Deepak Gulati, CIO of Argentiere Capital and Jeffrey Smith, CEO and CIO of Starboard Value.

It’s activist time, with Nelson Peltz of Trian Fund Management on stage.

Peltz says he’s not faded away from the scene on Pepsi
/quotes/zigman/238082/delayed/quotes/nls/pepPEP, where he has been pushing for the company to drop its drinks business. “Watch this space,” he says, and doesn’t rule out a potential proxy fight.

Andrew Ross Sorkin presses Peltz on Pepsi’s earnings performance, but Peltz says company isn’t delivering. Petz says the stock, meanwhile, is moving because investors are listening to what he has to say.

Peltz says he’s met with more than 100 shareholders in last six months.

Moelis, who has served as an adviser to Herbalife
/quotes/zigman/361145/delayed/quotes/nls/hlfHLF, says it’s not fair to lump Bill Ackman’s short bet on Herbalife to Peltz’s efforts. Moelis says Peltz is basically going to companies and saying the equivalent of “your children are even better looking than you think they are,” while the attack on Herbalife is seeking to destroy value.

Peltz says he’s very different from Ackman.

Well, what about Carl Icahn, Sorkin asks, noting he and Peltz are close friends.

Carl “has a different M.O.,” says Peltz, who also made his name in the 1980s as a corporate raider.

“What activism is doing is what private equity used to do … because I think activists are doing this for the benefit of the people who really own the business” he says.

A bit of a debate breaks out over activists and microphones. Peltz is a bit miffed that CNBC has in past asked Warren Buffett what he thinks Pepsi shareholders should do while not reminding viewers that Buffett is rival Coca Cola’s biggest shareholder.

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